THE INCLUSION OF INVESTMENT ARBITRATION PROVISIONS IN THE TTIP
The investment arbitration provisions contained in the international investment agreements (the "IIAs"), encompassing the substantive standards of protection of foreign direct investment (the "FDI") and ISDS provisions, make it possible for foreign investors to seek damages against States in arbitration proceedings, for breaches of international law.
Currently, there is no IIA between the US and any of the old EU Member States, while the US has concluded eight bilateral investment treaties ("BITs") with the majority of the new EU Member States (i.e. Bulgaria, Croatia, the Czech Republic and Slovakia, Estonia, Latvia, Lithuania, Poland, as well as Romania). This means that foreign investors from most of the EU Member States do not have the additional avenue of legal redress which is available under the IIAs. This, of course, applies in reverse to US investors in those European Member States. At the same time, more than half of the investment arbitration cases worldwide are brought by European investors.
The TTIP aims at ensuring that all EU Member States have a IIA with the US, which should enhance the protection of European investors in the US (and also, American investors in the EU). The TTIP would also provide US foreign investors with common ground for their claims for all EU Member States. In the TTIP, the EU attempts to find the right balance between the perennial problem of the protection of foreign investments: how to provide the right standards of protection and, at the same time, not limiting the States right to regulate. According to the European Commission, this seems achievable as the EU and the US are both developed powers having a similar understanding of this balance. The review of the proposed solutions confirms that such a balance is possible, but CEEP recommends further work on some of the proposed provisions.
CEEP supports the approach to include investment arbitration provisions into the TTIP, but also comments on the deficiencies of the EU’s approach. Specific considerations, as to the solutions proposed by the EU, are presented in CEEP’s answers to the EU’s ‘Public Consultation on Modalities for Investment Protection and ISDS in TTIP’ questionnaire.